Can metaverse coins crowd out traditional money forms when inflation surges?

• Analyzing dynamic connectedness of real and virtual money. • QVAR model reveals that the US dollar remains the dominant currency. • Gold and Bitcoin make US dollar stronger source of spillovers. • Stacks is a promising alternative money form. • Fiat, commodity and virtual money can co-exist. This paper investigates the dynamic interconnectedness between the dominant currency (the US dollar), a precious metal (gold), and a cryptocurrency (Bitcoin) with metaverse coins in the virtual economy. Using daily data spanning from December 14, 2021, to November 22, 2024, the study captures the period encompassing the Russia-Ukraine conflict. It employs the Quantile Vector Autoregressive (QVAR) framework to analyze bear, normal, and bull market conditions. Findings reveal that the USD, gold and Bitcoin are net sources of impacts on metaverse coins in extreme conditions, especially in bear markets. The US dollar remains the dominant currency against all forms of money and considerably strengthens as a net source of systemic impacts when gold and Bitcoin are included in the same system. This study aims to understand the extent to which well-established currencies and safe haven metals could function along with virtual currencies for providing a more sophisticated crisis-proof financial outlook with easier digital transactions. Exploring the complementarity or substitutability of money during periods of high inflation serves as a fundamental basis for informed decision-making by policymakers and investors.